We're used to thinking of ongoing performance management for
employees, for example, setting goals, monitoring an employee's
achievement of those goals, sharing feedback with the employee,
evaluating the employee's performance, rewarding the employee's
performance or firing the employee. However, performance management
applies to teams and organizations, as well. Organizational performance
involves the recurring activities to establish organizational
goals, monitor progress toward the goals, and make adjustments
to achieve those goals more effectively and efficiently. Those
recurring activities are much of what leaders and managers inherently
do in their organizations -- some of them do it far better than
others. (It's useful to think of organizational change in the
context of organizational performance, rather than change for
the sake of change, so the topic of Organizational Change will be useful to the
reader, as well.)

Also See the Library's Blogs Related to Organizational Performance

In addition to the articles on this current page, also see the following blogs
that have posts related to Organizational Performance. Scan down the blog's
page to see various posts. Also see the section "Recent Blog Posts"
in the sidebar of the blog or click on "next" near the bottom of a
post in the blog. The blog also links to numerous free related resources.

Identifying What to Improve in Organizations -- Using Organizational
Assessments

When seeking to improve the performance of an organization,
it's very helpful to regularly conduct assessments of the current
performance of the organization. Assessments might be planned,
systematic and explicit (these often are the best kinds of assessments)
or unplanned and implicit. Well-done assessments typically use
tools, such as comprehensive questionnaires, SWOT analyses, diagnostic
models (we often use these models without recognizing or referring
to them as such), etc., along with comparison of results to various
"best practices" or industry standards. The following
tools might be useful to you.

Organizational Assessments/Evaluations of Nonprofits

United
Way Management Indicators List
(This is a comprehensive, behaviors-based tool that also includes
a suggested "best-practices" standard, as well.)
Go to http://managementhelp.org/organizationalperformance/nonprofits/index.htm
(There are online, modified versions of this tool available here.)

Drucker Five-Question Self-Assessment Tool
(Guru, Peter Drucker, suggests five, overall, primary questions
that must be answered about any organization. There is a detailed
workbook that can be bought in order to guide the reader to answer
the questions. For now, you might consider the five key questions.)

Once you've conducted assessments of your organization, whether
explicitly or implicitly, it helps to have some basis by which
to analyze the results. Diagnostic models can provide that basis.
There are differing opinions about diagnostic models. Some people
suggest that these models should come without bias or suggested
solutions, and should be used to accomplish an objective, unfolding
understanding of organizations. Others believe that models should
suggest:
1. What types of practices should be occurring in the organization.
2. The order in which those practices should be occurring.
3. Standards of performance for various domains, such as individual
positions, teams, projects, processes, functions, programs and
the organization.
Thus, a diagnostic model can be useful in an organizational change
effort to:
1. Analyze results of data collection.
2. Identify issues that should be addressed by the organizational
change effort.
3. Suggest what actions should be taken to address the issues.
4. Evaluate the success of the organizational change effort.
There are numerous organizational diagnostic models available,
depending on one's beliefs on what the roles of the models should
be. Below are two examples. (NOTE: Many of the systems mentioned
later on below can be used as diagnostic tools.)A
Diagnostic Model for For-Profit OrganizationsA
Diagnostic Model for Nonprofit OrganizationsDo You Have a Venture Value Scorecard? |
Hot Sauce!

What's an Organizational Performance System?

Any or all of the approaches listed later on below will improve organizational
performance depending on if they are implemented comprehensively and remain
focused on organizational results. Each includes regular recurring activities
to establish organizational goals, monitor progress toward the goals, and make
adjustments to achieve those goals more effectively and efficiently. Typically,
these become integrated into the overall recurring management systems in the
organization (as opposed to being used primarily in one-time projects for change
-- see Organizational Change and Development
to Improve Performance later on below).

Some of the following, e.g., organizational learning and knowledge management,
might be interpreted more as movements than organization performance strategies
because there are wide interpretations of the concepts, not all of which include
focusing on achieving top-level organizational results. However, if these two
concepts are instilled across the organization and focus on organizational results,
they contribute strongly to organizational performance. On the other hand, the
Balanced Scorecard, which is deliberately designed to be comprehensive and focused
on organizational results, will not improve performance if not implemented from
a strong design.

For example, a large organization with highly standardized processes (such
as a manufacturing company with assembly lines) can carry out numerous and ongoing
measurements in a straightforward fashion. It also has extensive resources to
conduct the measurements and analyze results. ISO9000 certification is a strong
enhancement to a company's image. Therefore, the organization might pursue ISO9000
certification, including through use of continuous improvements in an overall
Total Quality Management approach. The organization may establish numerous benchmarks
for comparison to other organizations in the industry to get perspective on
how well the organization is doing, what results to pursue, etc.

On the other hand, a risk management company specializing in consultation to
protect against terrorism, has a bigger challenge to identify and track performance
results. Management might believe, for example, that the organization's means
for delivery of services are well out-of-date and that the organization is no
longer resourced to advise organizations about increasing threats from terrorism
that exist today. Therefore, the risk management company may choose to use business
process reengineering to completely redesign their organization from the ground
up.

Prominent Organizational Performance Improvement Models (Systems)

The following descriptions are general and brief. Follow the link to get more
information about each of the approaches. There certainly are other approaches
than those listed below for a planned, comprehensive approach to increasing
organizational performance. It may very well be that the vast majority of approaches
used in organizations are highly customized to the nature of the organizations,
and therefore not publicized or formalized in management literature.

Benchmarking:
Using standard measurements in a service or industry for comparison
to other organizations in order to gain perspective on organizational
performance. For example, there are emerging standard benchmarks
for universities, hospitals, etc. In and of itself, this is not
an overall comprehensive process assured to improve performance,
rather the results from benchmark comparisons can be used in more
overall processes. Benchmarking is often perceived as a quality
initiative.

Business
Process Reengineering: Aims to increase performance by radically
re-designing the organization's structures and processes, including
by starting over from the ground up.

Continuous
Improvement: Focuses on improving customer satisfaction through
continuous and incremental improvements to processes, including
by removing unnecessary activities and variations. Continuous
improvement is often perceived as a quality initiative.

Cultural
Change: Cultural change is a form of organizational transformation,
that is, radical and fundamental form of change. Cultural change
involves changing the basic values, norms, beliefs, etc., among
members of the organization.

ISO9000:
Is an internationally recognized standard of quality, and includes
guidelines to accomplish the ISO9000 standard. Organizations can
be optionally audited to earn ISO9000 certification. Another major
quality standard is the Baldridge Award. ISO9000
is a quality initiative.

Knowledge
Management: Focuses on collection and management of critical
knowledge in an organization to increase its capacity for achieving
results. Knowledge management often includes extensive use of
computer technology. In and of itself, this is not an overall
comprehensive process assured to improve performance. Its effectiveness
toward reaching overall results for the organization depends on
how well the enhanced, critical knowledge is applied in the organization.

Learning
Organization: Focuses on enhancing organizations systems (including
people) to increase an organization's capacity for performance.
Includes extensive use of principles of systems theory. In and
of itself, this is not an overall comprehensive process assured
to improve performance. Its effectiveness toward reaching overall
results for the organization depends on how well the enhanced
ability to learn is applied in the organization.

Management
by Objectives (MBO): Aims to align goals and subordinate objectives
throughout the organization. Ideally, employees get strong input
to identifying their objectives, time lines for completion, etc.
Includes ongoing tracking and feedback in process to reach objectives.
MBO's are often perceived as a form of planning.

Outcome-Based
Evaluation (particularly for nonprofits): Outcomes-based evaluation
is increasingly used, particularly by nonprofit organizations,
to assess the impact of their services and products on their target
communities. The process includes identifying preferred outcomes
to accomplish with a certain target market, associate indicators
as measures for each of those outcomes and then carry out the
measures to assess the extent of outcomes reached.

Program
Evaluation: Program evaluation is used for a wide variety
of applications, e.g., to increase efficiencies of program processes
and thereby cut costs, to assess if program goals were reached
or not, to quality programs for accreditation, etc.

Strategic
Planning: Organization-wide process to identify strategic
direction, including vision, mission, values and overall goals.
Direction is pursued by implementing associated action plans,
including multi-level goals, objectives, time lines and responsibilities.
Strategic planning is, of course, a form of planning.

Total
Quality Management (TQM): Set of management practices throughout
the organization to ensure the organization consistently meets
or exceeds customer requirements. Strong focus on process measurement
and controls as means of continuous improvement. TQM is a quality
initiative.

This Library topic of organizational performance management gives you a concise
overview of the approaches used by leaders and managers to regularly improve
the performance of organizations. However, if you want to learn about the approaches
used in one-time projects to address issues in organizations, including by accomplishing
significant and successful change in organizations, see the following topic:Organizational Change
and Development

For the Category of Organizational Development:

To round out your knowledge of this Library topic, you may
want to review some related topics, available from the link below.
Each of the related topics includes free, online resources.

Also, scan the Recommended Books listed below. They have been
selected for their relevance and highly practical nature.

Recommended Books

Managing Organizational Change

by Carter McNamara, published by Authenticity Consulting, LLC.
Provides complete, step-by-step guidelines to identify complex issues in for-profit or government organizations and successfully
resolve each of them. This book is also helpful to organizations that are doing fine now, but want to evolve to
the next level of performance. This is one of the truly comprehensive, yet practical, books about this complex subject!
Includes online forms that can be downloaded. Many materials in this Library's topic about guiding
change are adapted from this comprehensive book.

by Carter McNamara, published by Authenticity Consulting, LLC.
Provides complete, step-by-step guidelines to identify complex issues in nonprofit organizations and successfully
resolve each of them. This book is also helpful to organizations that are doing fine now, but want to evolve to
the next level of performance. This is one of the truly comprehensive, yet practical, books about this complex subject!
Includes online forms that can be downloaded. Many materials in this Library's topic about guiding
change are adapted from this comprehensive book.

The following books are recommended because of their highly practical nature and often
because they include a wide range of information about this Library topic. To get more information about
each book, just click on the image of the book. Also, a "bubble" of information might be displayed. You can click
on the title of the book in that bubble to get more information, too.

Growing Your Organization

The following books are recommended because of their highly practical nature and often
because they include a wide range of information about this Library topic. To get more information about
each book, just click on the image of the book. Also, a "bubble" of information might be displayed. You can click
on the title of the book in that bubble to get more information, too.